Economic Growth is Improving in Quebec

OTTAWA, Dec. 8, 2016 /CNW/ - Economic prospects are improving for Quebec, real GDP is forecast to grow by 1.4 per cent in 2016 and by an average of 1.9 per cent in 2017 and 2018, according to The Conference Board of Canada's Provincial Outlook: Autumn 2016.

"Quebec's economy is gaining momentum, the job market is performing relatively well, and consumers have kept retailers busy. Quebec's growth rate is expected to reach a level not seen since the end of the 2008-09 recession," said Marie-Christine Bernard, Associate Director, Provincial Forecasting. "However, business investment and exports have been a source of disappointment, as they have not accelerated as previously anticipated."

HIGHLIGHTS

• The province's real GDP is expected to increase by 1.4 per cent in 2016, followed by 1.9 per cent in 2017 and 2018.
• Exports should perform better going forward as rising metal and non‑metallic mineral production and aerospace help bolster export prospects.
• Employment will increase at a modest rate and will be driven mostly by job creation in the health care sector.
• With the exception of Newfoundland and Labrador, all provinces will see their economy expand next year.

Although business investment is expected to post a strong gain in 2017, thanks to a large increase in spending on machinery and equipment, the acceleration is projected to be short-lived as major projects are likely to have difficulties getting off the ground. Business investment is expected to decline slightly in 2018.

Household income should grow at a good pace next year, supporting household spending gains on both goods and services, which are forecast to grow faster than real GDP. However, after next year, consumption growth will slow slightly.

With business investment not expected to be a major contributor to economic growth in 2018, Quebec will increase its reliance on export industries. Exports of goods and services are expected to improve over the next two years as rising metal and non‑metallic mineral production and aerospace products help bolster export prospects. Mining, in particular, will play a significant role in the provincial economy as a new diamond mine enters commercial production.

Employment in Quebec will increase at a modest rate in 2017 and 2018, fueled by job creation in the health care sector, which is coping with an aging population. The job gains will help to reduce unemployment, but a large part of the decline in the provincial unemployment rate will reflect slower labour force growth as more and more workers retire.

The Provincial Outlook: Autumn 2016 is available via the Conference Board's e-Library.

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SOURCE Conference Board of Canada

Yvonne Squires, Media Relations, The Conference Board of Canada, Tel.: [phone] ext. 221, E-mail: [email protected]; Juline Ranger, Director of Communications, The Conference Board of Canada, Tel.: [phone] ext. 431, E-mail: [email protected]